U.S. SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                     Form 10-QSB

(Mark One)

[x]  Quarterly Report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the quarterly period ended June 30, 2002
--------------------------------------------------------------------------

[ ]  Transition Report under Section 13 or 15(d)of the Exchange Act For the
     Transition Period from ________  to  ___________
--------------------------------------------------------------------------

                     Commission file number: 333-53516

                           MERCADO INDUSTRIES, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

      Nevada                                                76-0639842
-------------------------------                         ------------------
(State or other jurisdiction of                          (IRS Employer
incorporation  or  organization)                        Identification No.)

    14601 Bellaire Blvd. Suite 338, Houston, TX                   77083
------------------------------------------------------          ---------
    (Address of principal executive offices)                    (Zip Code)

                                 (281) 564-6418
                             ----------------------
                           (Issuer's telephone number)

-------------------------------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                          Yes [X]     No [ ]

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDING DURING THE PRECEDING FIVE YEARS

Check whether the  Registrant  filed all  documents  and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.

                                         Yes [ ]     No [ ]

                APPLICABLE ONLY TO CORPORATE ISSUERS

                                    1

<PAGE>

The Registrant has 20,000,000 Common Stock, authorized, 2,000,000 shares
of Common stock issued and outstanding, par value $0.001 per share as of
June 30, 2002.  Preferred Stock, $0.001 par value per share, 5,000,000
shares authorized, no Preferred Stock issued nor outstanding as of
June 30, 2002.

Traditional Small Business Disclosure Format (check one)

                                        Yes [  ] No [X]


                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements.................................   4
          Balance Sheet (unaudited)............................   5
          Statements of Operations (unaudited).................   6
          Statements of Cash Flows (unaudited).................   7
          Notes to Financial Statements........................  8-9

Item 2.  Management's Discussion and Analysis of Plan
           of Operation........................................  10


PART II. OTHER INFORMATION

Item 1.   Legal Proceedings....................................  14

Item 2.   Changes in Securities and Use of Proceeds............  14

Item 3.   Defaults upon Senior Securities......................  14

Item 4.   Submission of Matters to a Vote
           of Security Holders.................................  14

Item 5.   Other Information..................................... 14

Item 6.   Exhibits and Reports on Form 8-K...................... 14

Signatures...................................................... 15

                                       3

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS

The unaudited financial statements of registrant for the six months ended
June 30, 2002, follow.  The financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of
the results for the interim period presented.

                                      4


<PAGE>

                             MERCADO INDUSTRIES, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                                   BALANCE SHEETS

<TABLE>
<CAPTION>

BALANCE SHEETS (UNAUDITED)

                                                    June 30,     December 31,
                                                      2002           2001
                                                  ------------   ------------
                                                   (unaudited)
<S>                                               <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents                      $       747    $      2,386
   Inventory                                                                -
                                                  ------------   ------------
       Total current assets                               747           2,386
                                                  ------------   ------------
Fixed assets, net                                                           -
                                                  ------------   ------------
TOTAL ASSETS                                      $       747    $      2,386
                                                  ============   ============


LIABILITIES AND STOCKHOLDERS' EQUITY

   Accounts payable and accrued expenses                    85             85
   Advances by shareholder                               1,000          1,000
                                                  ------------   ------------
     Total current liabilities                           1,085          1,085
                                                  ------------   ------------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.001 par value;
    5,000,000 shares authorized,
    -0- shares issued and outstanding                        -              -
  Common stock, $0.001 par value;
    20,000,000 shares authorized,
  2,000,000 shares issued and outstanding                 2,000         2,000
  Additional paid-in capital                              3,750         3,750
  Deficit accumulated during
   the development stage                                 (6,088)       (4,449)
                                                    ------------  ------------

     Total stockholders' equity                            (338)        1,301
                                                    ------------  -------------

     Total liabilities and stockholders' equity    $        747  $      2,386
                                                   ============  =============
</TABLE>

                                       5

<PAGE>
                              MERCADO INDUSTRIES, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                              STATEMENT OF OPERATIONS
                                    (UNAUDITED)


<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS (UNAUDITED)


                      Three Months Ending   Six Months Ending
                           June 30,              June 30,       March 29, 2000
                      -------------------  -------------------  (Inception) to
                         2002     2001        2002     2001     June 30, 2002
                      --------- ---------  --------- ---------  --------------
<S>                   <C>       <C>        <C>       <C>        <C>
Revenue               $       - $       -  $       - $       -  $           -
                      --------- ---------  --------- ---------  --------------
Gross profit                  -         -          -         -              -
                      --------- ---------  --------- ---------  --------------

Expenses:
  General and
   administrative           777       834      1,639     1,071          6,088
                      --------- ---------  --------- ---------  --------------
Total Expenses              777       834      1,639     1,071          6,088
                      --------- ---------  --------- ---------  --------------

Net loss              $    (777) $   (834)  $ (1,639) $ (1,071)  $     (6,088)
                      =========  =========  ========= =========  ==============

Net loss per share    $   (0.00) $  (0.00)  $  (0.00) $  (0.00)  $      (0.00)
                      =========  =========  ========= =========  ==============

Weighted average
  number of common
  shares outstanding  2,000,000 2,000,000  2,000,000 2,000,000       2,000,000
                      ========= =========  ========= =========   ==============

</TABLE>

                                      6

<PAGE>

                             MERCADO INDUSTRIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

STATEMENT OF CASH FLOWS

                                                        March 29, 2000
                                    Six months ending   (inception)to
                                          June 30,         June 30,
                                    -----------------  ----------------
                                      2002       2001        2002
                                    ---------  --------- -------------
<S>                                 <C>         <C>        <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES
Net (loss)                         $  (1,639)  $ (1,071) $    (6,088)
Adjustments to
 reconcile net loss
 to net cash used by
 operating activities
    Depreciation
    Decrease (increase)
      in inventory
                                   ---------  ---------  -------------
NET CASH USED IN
 OPERATING ACTIVITIES              (1,639)       (1,071)       (6,088)

CASH FLOWS FROM
 INVESTING ACTIVITIES                   -             -             -

CASH FLOWS FROM
 FINANCING ACTIVITIES
  Loan from shareholder                 -          1,000        1,085
  Donated capital                       -          3,750        3,750
  Issuance of common
    stock                               -                       2,000
                                ---------      --------- -------------

NET CASH PROVIDED BY
 FINANCING ACTIVITIES                   -          4,750        6,835
                                ---------      --------- -------------

NET INCREASE IN CASH               (1,639)         3,679          747

CASH AND CASH
 EQUIVALENTS
  -beginning of period              2,386            504            -
                                 ---------     --------- -------------

CASH AND CASH
 EQUIVALENTS
  -end of period                   $  747       $   4,183 $       747
                                   =========    ========= ============

SUPPLEMENTAL DISCLOSURES

  Interest paid                    $       -  $       - $           -
                                   =========  ========= =============
  Income taxes paid                $       -  $       - $           -
                                   =========  ========= =============

</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      7

<PAGE>



                             MERCADO INDUSTRIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2002

Note 1 - Basis of Presentation

The consolidated interim financial statements included herein,
presented in accordance with United States generally accepted
accounting principles and stated in US dollars, have been prepared
by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission.  Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained therein.
It is suggested that these consolidated interim financial statements
be read in conjunction with the financial statements of the Company
for the year ended December 31, 2000 and notes thereto included in
the Company's 10-KSB annual report.  The Company follows the same
accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of
annual results.

Note 2 - Going concern

These consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applicable
to a going concern which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course
of business.  As at June 30, 2001, the Company has not recognized
revenue to date and has accumulated operating losses of approximately
$6,088 since inception.  The Company's ability to continue as a going
concern is contingent upon the successful completion of additional
financing arrangements and its ability to achieve and maintain
profitable operations.  Management plans to raise equity capital to
finance the operating and capital requirements of the Company.
Amounts raised will be used to further development of the Company's
products, to provide financing for marketing and promotion, to secure
additional property and equipment, and for other working capital
purposes.  While the Company is expending its best efforts to achieve
the above plans, there is no assurance that any such activity will
generate funds that will be available for operations.  These conditions
raise substantial doubt about the Company's ability to continue as a
going concern.  These financial statements do not include any adjustments
that might arise from this uncertainty.


                                   8
<PAGE>


                             MERCADO INDUSTRIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2002


Note 3 - Related party transactions

A shareholder donated $3,750 to the Company as additional paid-in
capital.

The Company does not lease or rent any property.  Office services are
provided without charge by a director.  Such costs are immaterial to
the financial statements and, accordingly, have not been reflected
therein.  The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in
other business opportunities.  If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests.  The Company
has not formulated a policy for the resolution of such conflicts.

Note 4 - Note payable - related party

A shareholder donated $3,750 to the Company as additional paid-in
capital.


<PAGE>


                                     9
<PAGE>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

Mercado Industries, Inc. is a development stage entity, and has neither
engaged in any operations nor generated any revenues to date.

The Company plans to take advantage of the interest in online travel
Companies by creating an Internet site that is aimed at drawing consumers
who wish to make their own travel arrangements for the lower fares that go
along with self-booked reservations.  This site is linked to an already
operational website called www.mercadoindustries.com that is set up to
facilitate these arrangements.

Mercado plans to offer consumers a simple, usable and complete do-it-
yourself travel site on the Internet.  This proposed on-line travel site
would offer a convenient way to configure and book any air, lodging
and auto rental package to destinations in the U.S.

Mercado's major expense will lie in providing the revenues necessary to
purchase listings with major Internet search engines who will funnel clients
to the Mercado website when those clients request low-cost fares, room rates
and vehicle rentals for travel.  As in the world of print advertising, the
more you pay, the greater the reach; though on the Internet, it is not
column inches you buy with the extra dollars, but prioritized placement of
the Company's website's listing in response to customer requests for
discounted travel providers.

Going Concern - The Company experienced operating losses for the period
ended June 30, 2002.  The financial statements have been prepared
assuming the Company will continue to operate as a going concern which
contemplates the realization of assets and the settlement of
liabilities in the normal course of business.  No adjustment has been
made to the recorded amount of assets or the recorded amount or
classification of liabilities which  would be required if the Company
were unable to continue its operations.  Management believes it has
enough funds to operate for the next twelve (12) months without the
need to raise additional capital to meet its obligations in the normal
course of business.


                                      10

<PAGE>

Loss Per Share - The Company adopted the provisions of Statement
Of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" that established standards for the computation, presentation
and disclosure of earnings per share ("EPS"), replacing the presentation
of Primary EPS with a presentation of Basic EPS.  It also requires dual
presentation of Basic EPS and Diluted EPS on the face of the income
statement for entities with complex capital structures.  The Company did
not present Diluted EPS since it has a simple capital structure.

The Company has not pursued or explored any opportunities for an
acquisition or merger.  This does not preclude that the Company may not
explore any opportunities in the future.


Results of Operations
---------------------

As a development stage Company, the Company has yet to generate any revenues.
In addition, the Company does not expect to generate any revenues over the
next approximately to twelve (12) to eighteen (18) months.  During quarter
ended June 30, 2002, the Company had no revenues and $777 in general and
administrative expenses.  This compares to a net loss of $834 for the same
period last year.  For the first six months ended June 30, 2002, the Company
had a net loss of $1,639 as compared to $1,071 for the same period last year.
Since the Company's inception on March 29, 2000 the Company has lost $6,088.
The Company does not have any material commitments for capital expenditures.


Plan of Operation
-----------------

Management does believe that the Company will be able to generate some
revenues during the coming year, management does not believe the
company will generate any revenues or profit until it becomes fully
operational.  As developmental and marketing costs will most likely exceed
any anticipated revenues.

As stated earlier in this filing, the Company believes it has enough
monies to sustain itself for the next twelve months, during this
developmental process.

                                     11
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company is authorized to issue 20,000,000 shares of its $0.001 par
value common stock and 5,000,000 shares of its $0.001 par value preferred
stock.

On March 14, 2000, the Company issued 2,000,000 shares of its $.001 par
value common stock for cash of $2,000.

On January 11, 2001, the Company filed with the U. S. Securities and
Exchange Commission for their review and approval a SB-2 Registration to
further capitalize the Company by offering for sale 3,000,000 shares of
common stock, at a purchase price of $0.025 per share.  The completion
of this offering would further capitalize the Company by $75,000, less
$6,000 in offering costs for a net to the Company of $69,000.  Without
this funding, the Company will be unable to move its business plan further.

To further capitalize the Company's sole shareholder contributed $4,750 to
the Company as additional paid-in capital.


Employee
--------

The Company currently has one employee who is the sole officer and
director of the Company.  This employee has received no compensation
through June 30, 2002.  The Company does not plan to hire any
additional employees until it can become an profitable entity.

The Company has no material commitments for capital expenditures nor
does it foresee the need for such expenditures over the next year.


Market For Company's Common Stock
---------------------------------

The common stock of the Company is currently not traded on the NASDAQ OTC
Bulletin Board or any other formal or national securities exchange.  There
is no trading market for the Company's Common Stock at present and there has
been no trading market to date.

There is currently no Common Stock which is subject to outstanding options
or warrants to purchase, or securities convertible into, the Company's
common stock.


Dividend Policy
---------------

The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.



                                        12
<PAGE>

Forward-Looking Statements
--------------------------

This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended.  All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including
such things as future capital expenditures (including the amount and nature
thereof), finding suitable merger or acquisition candidates, expansion and
growth of the Company's business and operations, and other such matters are
forward-looking statements.  These statements are based on certain
assumptions and analyses made by the Company in light of its experience and
its perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances.  However, whether actual results or developments will conform
with the Company's expectations and predictions is subject to a number of
risks and uncertainties, general economic market and business conditions; the
business opportunities (or lack thereof) that may be presented to and pursued
by the Company; changes in laws or regulation; and other factors, most of
which are beyond the control of the Company.

This Form10-QSB contains statements that constitute "forward-looking
statements."  These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; (iii) the internet and internet commerce; and, (iv) the Company's
financing plans.  Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors.  Factors that could adversely affect actual results and performance
include, among others, the Company's limited operating history, dependence
on continued growth in the use of the internet, the Company's inexperience
with the internet, potential fluctuations in quarterly operating results and
expenses, security risks of transmitting information over the internet,
government regulation, technological change and competition.

Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary  statements and there can be no assurance
that the actual results or  developments  anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations.  The
Company assumes no obligations to update any such forward-looking statements.


                                    13
<PAGE>


                       PART II OTHER INFORMATION

ITEM 1.  Legal Proceedings

The Company is not a party to any legal proceedings.

ITEM 2.  Changes in Securities and Use of Proceeds

None.

ITEM 3.  Defaults upon Senior Securities

None.

ITEM 4.  Submission of Matters to a Vote of Security Holders

During the quarter ended June 30, 2002, no matters were submitted to
the Company's security holders.

ITEM 5.  Other Information

None.

ITEM 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

None.

(b)  Reports filed on Form 8-K

The Company filed a Current Report dated March 18, 2002, pursuant to Item 4
("Changes in Accountants") entitled "Changes in Registrant's Certifying
Account."


                                        14
<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                       MERCADO INDUSTRIES, INC.
                                       ------------------------
                                           (Registrant)

Date:  August 13, 2002                 By: /s/ Ruth Selmon
                                       -----------------------
                                               Ruth Selmon
                                               President/
                                               principal executive officer/
                                               principal accounting officer
                                               and sole director


                                        15
<PAGE>